Statnett enters into energy options with several companies to handle power situation
(7/16/2010)
Statnett has entered into energy option agreements to reduce consumption with several industrial companies for the coming winter. Under the agreement, Statnett can exercise these options to have a capacity of 600 megawatt (MW) made available, with a total energy volume of 1 100 GWh. Energy options have been purchased throughout the country, but during this purchasing round, the main focus has been on the western and central regions. The total cost of the energy options is NOK 48 million.
The winter of 2010 was exceptionally dry and cold in many parts of the country. Little snow last winter resulted in a high risk of having to meet the coming winter with lower than normal levels in the reservoirs. Consequently, Statnett has decided to purchase more energy options than in previous years. The energy option scheme is a national ”insurance scheme”, and options have been purchased in all parts of the country to be able to handle any highly strained energy situations that may occur before next spring.
Under the scheme, participating companies are obliged to reduce their power consumption for a few weeks should a situation occur where there is a risk of rationing. At first, the companies will be compensated for the option, or possibility. The companies will receive additional compensation should Statnett exercise the options.
The energy option scheme was introduced in 2006. Since then, Statnett has entered into energy option agreements relating to consumption every year. The purpose of the scheme is to reduce the risk of rationing in a highly strained power situation (SAKS). In addition to energy options, Statnett will also make use of reserve power plants in a highly strained power situation to avoid rationing. Implementation of the scheme is subject to approval from the Norwegian Water Resources and Energy Directorate (NVE).
